I recently attended a body shop conference in the Midwest. A few shop owners were having a round table discussion and, as usual, the topic of compensation from insurance companies raised its ugly head. I asked each shop owner if he’d send me a copy of an estimate, and a couple of them obliged. One estimate had a bottom line of $3,022 in repairs. I re-wrote the estimate using procedure page (P-page) logic and was able to increase the estimate to $3,388. The second shop owner’s estimate totaled $623. Again, I re-wrote the estimate using the P-pages and was able to increase the estimate to $768.
Now, I don’t advocate charging for an operation or procedure that’s not performed, but if it’s in the procedure pages and it’s done, then you should be compensated. I don’t profess to be the “king of estimate writing,” but I do possess a better-than-average knowledge of the P-pages. Let me fill you in on some little-known secrets.
Before getting into P-page logic, let’s look at the word “justification.” Webster defines justification as “the process of showing what’s needed or right.” What it doesn’t mean is “that’s what I charge, and this is my justification.”
Justification for line items on an estimate to restore a vehicle to its pre-accident condition starts with the original equipment manufacturers (OEMs). Their repair procedures take precedent no matter what. If you follow their repair manual, you’re ensuring that the vehicle is repaired using OEM-tested procedures. If OEM repair manuals aren’t available, follow I-CAR’s recommended procedures, available on I-CAR’s Web site (www.i-car.com).
Did you know that if you’re replacing a door shell on a late model Toyota Camry, you must add a coating of cavity wax to the inside of the door shell? Would you add cavity wax to a new Honda hood? (This could be a trick question.) Your answer better be yes because that’s a procedure in Honda’s repair manual.
Let’s Get Down to Business
In an earlier article (“Finding Your True Cost of Business,” November 1999 BodyShop Business), I showed you the formula Sale – Cost = Profit, which can be applied to all businesses large and small. You can increase your profits by increasing your sales, decreasing your costs or a combination of both.
Let’s use a hypothetical repair with no supplements to demonstrate my point. We’ll illustrate the repair by drawing a circle with a 12-inch diameter. Within that circle are all the repair processes required to return the vehicle to pre-accident condition.
What I’ve seen over the past couple of years is that many shops’ estimates fall in the 10-inch diameter range. In other words, they perform numerous repair tasks but don’t get compensated for them because they don’t itemize them, for various reasons, on the estimate.
If we understand what’s needed to return a car to pre-accident condition and we can justify it, then we can start getting compensated for it. I don’t advocate putting unnecessary procedures on an estimate, and I detest people who put items on their estimates but don’t perform those tasks. That’s fraud. But, by better utilizing the P-pages, you can be legitimately compensated for those tasks.
Welcome to the Real World
Let’s use some real-world examples to illustrate my point about P-pages.
1. You have a dent in the right fender of the vehicle that will take two hours to repair. Most people will write on the estimate “repair fender, R&I attached parts, mask, color sand, hazardous waste and cover car.” That’s OK, but the repair estimate is only covering part of your costs to do the entire repair. (Remember the circle illustration?)
You need to restore the panel to the OEM level before you can paint. That means restoring the E-coat primer, which is done by applying a self-etch primer or an epoxy primer (that will require both labor and materials). As a final step, you’ll also need to apply polyurethane primer and feather edge the repaired area. These two steps are outlined by the information providers, and what you charge for these procedure is entirely up to you – but you must include them on your estimate to be compensated.
What’s your justification for these procedures? First, you need to restore all corrosion protection as per OEM and I-CAR. Second, you need to get the part to OEM level as per the information providers.
2. Another area that needs addressed are jambs – whether they’re for the hood, doors or deck lid. There’s nothing worse than showing a customer what a great job your techs have done only to open the hood or door and find everything coated with overspray. I know many of you mask off all your jambs, but are you including that procedure on your estimate? Did you know that Mitchell actually shows times for the procedure? CCC and ADP both show in their P-times that masking off the jambs isn’t an included task. If your facility is performing the task of masking off the jambs, you should charge for it.
3. Your shop is replacing a door skin on the left front door of a vehicle. Did you know that removing and installing the mirror isn’t an included item in Mitchell or CCC? What about the belt molding? It isn’t included in any of the three systems. How about the door glass? Again, not included in CCC and Mitchell. Here’s one that nearly everyone misses: the foam or adhesive that sits between the door skin and the intrusion beam. Have you checked the price of those foam tubes lately?
When you remove a door trim panel, there’s a piece of plastic covering the interior of the door. That piece of plastic is known as a moisture barrier, and its purpose is to keep the trim panel dry. There are no P-times for removing and replacing it. Should we, as an industry, call this an included item or should we charge to R&I it? It’s your call.
4. Here are two small paint items I’d like you to consider. You’re writing an estimate to replace a front bumper, headlamps, a hood and fenders on a late-model Ford Mustang. If you’re writing the estimate on CCC and you start with the bumper but don’t click on painting the bumper off the car, the first overlap deduction is taken on the hood; this can result in up to a two-hour reduction in overlap (40 percent of the first panel), and you could have five hours of painting time on the hood.
Did you know that 2.5 hours maximum on clears only pertains to labor and not materials? If you do the calculations on the total clear hours needed, subtract the 2.5 hours and then multiply that number by your paint multiplier, you’ll have the extra clear needed for the job. (I have a separate line item that I call additional clearcoat materials needed above 2.5 max.) In the Mitchell P-times under refinish times, it states that the 2.5 max “isn’t intended to determine the quantity or cost of materials required for the application of clear.”
5. You’re changing a front apron without the rail, but there’s no damage to the suspension. In CCC and Mitchell systems, removing and installing the suspension isn’t an included item – and neither is alignment. So don’t forget to charge for them.
Let’s say that you need to R&I the motor and transmission for access. Would you include the axle shafts as part of the operation? If you remove them for access, you need to charge for their removal because they aren’t included in the R&I of the engine/transmission assembly.
6. You just purchased a front clip for a late-model Chevrolet. Are you going to charge for the disassembly of the clip or have your metal technician “eat” the labor to take it apart? How about the disassembly on that used deck lid equipped with a spoiler, lights and emblems for a Ford SC Thunderbird?
Get Paid for Your Work
I could share a lot more examples, but space is limited. Instead, I’ve prepared a list of procedures that includes specific operations, what’s needed and what might be needed to complete the repair. If you’d like a copy of this five-page document, e-mail me at [email protected] and I’ll send it to you.
If you ask for an operation, make sure it’s necessary and that you perform it. Otherwise, you’re committing fraud. On the other hand, be sure you’re compensated for all the justified procedures you perform to bring a vehicle back to pre-accident condition. Get familiar with the P-pages in your estimating system, and start getting compensated for work you’ve been doing all along.
Contributing editor Toby Chess, AAM, is director of technical training for Caliber Collision Centers. He’s also the Los Angeles I-CAR chairman, an I-CAR instructor and a certified ASE Master Technician.